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Personal, Commercial Lines Composite Rates Moderate in Second Quarter

​While the composite rates for both commercial and personal lines decreased overall in second quarter 2021, all segments experienced rate increases.
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personal, commercial lines composite rates moderate in second quarter

The second quarter 2021 composite rate for commercial lines decreased to 5.9%, down from 7% in the first quarter of 2021, according to MarketScout. The personal lines composite rate is also down slightly to 4.8% from a 5.6% rate assessment at first quarter.

While the overall composite rate index moderated, all commercial segments experienced rate increases. Professional line rates positively impacted the overall commercial composite rate with an increase of just 4.3% in the second quarter, compared to 11.3% in the first quarter.

However, large rate increases were seen in the umbrella and excess line of business, which saw an increase of 11.6%. Directors & officers liability rates increased 11%, commercial property increased 9.6%, auto increased 9% and business interruption increased 7%.

“This quarter there was a slight trend towards rate moderation, but this could be an aberration," says Richard Kerr, CEO of MarketScout. “Let's see how the rest of the year plays out before we make any predictions about market rates moderating. We are now entering hurricane season and this fall we will be in wildfire season. Property rates continue to rise and could get even higher."

Below is a table containing market data of second quarter commercial rate increases.

Commercial property

Up 9.6%

Business interruption

Up 7%

Business owners policy

Up 4%

Inland marine

Up 4.2%

General liability

Up 6.3%

Umbrella and excess

Up 11.6%

Commercial auto

Up 9%

Workers compensation

Up 1%

Professional liability

Up 4.3%

D&O Liability

Up 11%

Employment practices liability

Up 7%

Fiduciary

Up 2%

Crime

Up 3%

Surety

Up 1.3%


Additionally, small commercial insurance buyers paying $25,000 or less in premium were paying a slightly lower rate at 5.3% at second quarter, down from 6.3% in the first quarter.


Personal, Commercial Lines Composite Rates Moderate in Second Quarter
On the personal lines side, MarketScout reported that all personal lines coverages were less expensive in the second quarter in comparison to the first quarter.

Over the next five or six months, “rates could change quickly," Kerr says. “An increasing number of homeowners are using non-admitted insurers. When non-admitted insurers are hit with significant losses, they can adjust rates very quickly."

Below is a table containing market data of second quarter personal line rate increases.

Homeowners under $1,000,000 value

Up 4.6%

Homeowners over $1,000,000 value

Up 5.6%

Automobile

Up 4%

Personal Articles

Up 4%


MarketScout is a national MGA and wholesale broker specializing in assisting agents in placing high net worth personal lines business.
15959
Thursday, July 29, 2021
Personal Lines